The Difference in Philosophy Between Medical Savings Account and the Present System

Stanley Feld M.D.,FACE,MACE

Let us assume that everyone wants the best Healthcare System possible. I have proposed an effective Medical Savings Account system as the backbone to repairing the healthcare system. Many stakeholders would disagree. Their vested interest would be disrupted by a change in the system. However, the system has to change to a self repairing system because the existing system is so dysfunctional. It hardly works anymore for the most important stakeholder the patient.

The difference between the MSA and the present managed care fee for service model is both philosophical and technical. The philosophy difference deals with respect for the consumers (patients) ability to make wise medical choices. The technical component is the ineffective manner information technology is used presently and should be used in the future.

Presently, to control the costs in the system we pass laws and rules and regulation to limit usage and abuse of the system. In turn, we need larger bureaucratic institutions to administer the new rules and regulations. The result is a tremendous waste and an increase in utilization of non value added resources, resulting in increased cost. The increase in cost leads to an increase in healthcare rationing. The resulting fall out is the increasing number of uninsured patients. The result is a further increase in healthcare costs to society. Rather than controlling the perverse incentives the system creates, the increase bureaucracy stimulates more perverse incentives. Individual self interests continue to spend other peoples’ money, while bureaucratic institutions like the government and the insurance industry continue to make more rules and regulations to block the individuals’ self interests.

The Medical Saving Accounts system creates a system that provides incentive for individuals to become prudent purchaser of health care services in a price transparent environment. Individuals’ having control over their own health care dollar will be prudent and only purchase services that are needed and worth the price. They are spending their own money, or money awarded to them, and not other peoples’ money. The right amount to spend is their choice as long as the prices reflect the real costs of medical services. The government, the employers and the insurance industry would need to negotiate charges from their real costs in a transparent environment.

The result of negotiating charges on the basis of costs creates a need for innovative thinking by insurance companies, hospitals and physicians. The competitive medical market place of consumer driven healthcare forces the hospitals, insurance companies and physicians to realize it is in their vested interest to lower price, improve quality of care and improve communications with the patient in order to survive.

If we develop this system, the healthcare system would become self repairing and cost efficient.